American Electric Power, the USA’s largest electricity generator, has advanced its European wholesale strategy by acquiring 4 000MW of UK coal-fired generation – two power stations – from Edison Mission Energy. The acquisition is valued at £650 million, and is expected to add immediately to AEP’s earnings, to the tune of $0.06 per share in 2002.
Linn Draper, AEP chairman, associated the acquisition with the company’s operating strategy in the USA, saying “we have been very successful with a strategy that links wholesale marketing and trading operations to generating assets. This acquisition allows us to replicate our … wholesale model in the UK”.
It had appeared that Dynegy Inc was the front runner to acquire Fiddler’s Ferry (Lancashire) and Ferrybridge (Yorkshire) power stations, bought by Edison for 1.3 billion in 1999. Since then the market has slumped, reducing their value.